There's much excitement in the markets this morning over the announced GDP numbers: 3.5% growth in the third quarter. Equity markets are in rally mode as I write this and the U.S. Dollar and the Yen are plunging in the foreign exchange market as people move from "safety" to "risk." And thus the headline:

Economy grows in 3Q, signals end of recession

But it's fake. These numbers are not reflective of actual growth. Check this out:

WASHINGTON (AP) -- The U.S. economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended...

...Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes. [emphasis mine]

This isn't growth, it's redistributionism. Worse, that cash from "the government" is borrowed - the government does not have cash, it has what it steals from us, or what it borrows, debts that we are obligated to pay back.

Real growth happens when new wealth is created. Taking money from one person and giving to another, which that other person goes out and spends, is not wealth creation. In the long run, the person taken from says "screw this" and stops producing what is only taken from him, and the well begins to run dry. This "growth" is, at best, an illusion (and in truth it is an outright lie).

The next thing that will happen will be that unemployment numbers will persist at their current high levels, or go even higher, and millions of bewildered people will wail "what happened?!"

On the bright side - the Democrats have been claiming that economic recovery will not be possible without health care reform. Now that they're claiming credit for bringing about economic recovery but have not yet gotten their tentacles into health care, they have to admit they were wrong. Think they'll do that?